2022-05-17 03:13:26
Technical tracker - HLIB Retail Research – 17 May 2022
A possible comeback?Will aluminium price rebound? Impacted by the China lockdown since March, aluminium prices have corrected 21% as the lockdown in the largest consuming country has triggered a possible downward shift in the aluminium consumption curve. Consequently, PMETAL (ASEAN's largest aluminium producer) has corrected 25% in a short span of only two months, making it one of the worst-performing KLCI components 2QTD.
Nevertheless, we reckon the fall in aluminium prices may be temporary amid a structural supply deficit in the near term. In our view, the robust demand for aluminium is here to stay, as we are just at the start of the adoption of EV and solar panels on the back of the rising de-carbonization efforts globally. On the other hand, aluminium supply will continue to face disruption following the Ukraine and Russia conflict and power rationing (especially on fossil fuel-based power source) in China. We believe that the combination of robust demand and stunted supply coupled with higher energy input cost will cushion further downside to aluminium prices.
Also, taking cue from the China easing domestic new Covid-19 cases and potential relaxation of its SOP and reopening of its major economies, we reckon the aluminium prices will stage a turnaround in anticipation of an increase in aluminium consumption from China. Hence, current PMETAL’s 31% correction from YTD high of RM7.40 provides a good opportunity for investor to accumulate, as PMETAL's share price is highly correlated to aluminium prices (+95% correlation based on 3Y historical data).
Twin turbo-boosting growth. On top of the buoyant aluminium price outlook, the full commencement of Phase 3 Semalaju expansion, together with additional earnings boost from its 25%-owned Phase 1 PT Bintan alumina refinery business, will support PMETAL’s earnings growth further for FY22-23. HLIB maintains a BUY rating with a TP of RM7.71, translating to an enormous 52% upside.
Grossly oversold. Technically, PMETAL is grossly oversold and is poised for a technical rebound, supported by bottoming up RSI and potential downtrend reversal in MACD last Friday. A successful rebound above RM5.20 will spur the prices toward RM5.60-5.87-6.00 levels. Cut lost at RM4.65.
Collection range: RM4.80-4.90-5.04
Upside targets: RM5.60-5.87-6.00
Cut: RM4.65----------------------------
PMETAL将卷土重来？铝价会反弹吗？受中国自 3 月以来的封锁影响，铝价已回调 21%，因为最大消费国的封锁已引发铝消费曲线可能向下移动。因此，PMETAL（东盟最大的铝生产商）的股价在短短两个月内修正了 25%，使其成为 2QTD 表现最差的蓝筹股。
尽管如此，我们认为在短期内供应短缺的情况下，铝价持续下跌可能是暂时的。在全球减少碳使用的政策下，电动汽车和太阳能电池板的采用将逐渐普遍，因此我们认为铝的强劲需求将延续。另一方面，在乌克兰和俄罗斯的持续冲突以及中国的电力供应受影响（尤其是化石燃料能源）的情况下，铝供应将面临中断。我们认为，强劲的需求和供应不足加上能源投入成本上升将缓冲铝价的进一步下调。
此外，由于中国新的 Covid-19 病例开始放缓以及其 SOP 可能放宽以让主要经济体重新开放，我们认为铝价预计中国对铝的消费量将增加将出现好转。由于 PMETAL 的股价与铝价高度相关（其3 年历史数据的相关性为 +95%），目前 PMETAL 从年初至今高点RM7.40回调 31% 为投资者提供了一个很好的增持机会。
双项增长因素。除了乐的铝价维持高位之外，Semalaju 第三阶段扩建已全面启动，加上其持有 25% 股权的Phase 1 Pt Bintan氧化铝精炼业务的额外盈利增长，将进一步支持 PMETAL 在 22-23 财年的盈利增长。丰隆投行维持买入评级，目标价为 RM7.71，相当于 52% 的上涨空间。
严重超卖。技术上，PMETAL 处于严重超卖阶段，受RSI 触底和上周五MACD 下行趋势反转的支撑可能会使股价技术反弹。股价若成功反弹至 RM5.20以上将推动价格向 RM5.60-5.87-6.00水平。投资者可把止损设置在 RM4.65。
买入范围：RM4.80-4.90-5.04
上行目标：RM5.60-5.87-6.00
止损：RM4.65
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